Victory for Card Activation?

Scott Daniels | September 27, 2010

The news service IP LAW360 is reporting this morning a victory for Card Activation in the reexamination of its U.S. Patent No. 6,032,859 – specifically that the PTO issued last week a reexamination certificate confirming the patentability of most of the claims of the ‘859 patent.  That patent claims a “method for processing debit purchases” and appears to have particular application for the now popular gift cards.  Card Activation has sued quite a number of high-profile consumer product companies, such as 7-Eleven and Costco, and is said to have sent threat letters to more than 600 retailers.

The PTO’s Notice of Intent to Issue Ex Parte Reexamination Certificate, dated June 23, however, tells a somewhat more complicated story. The Notice shows that reexamination was granted against each of the claims for which reexamination had been requested – it is customary that a competitor seeks reexamination against all claims that might have a significant impact on the market.

More importantly the ‘859 patentee amended independent claims 20 and 29 to include the “customer authorization code” and “clerk authorization code” limitations of dependent claims 21 and 32 to overcome a prior art rejection.  Such an amendment of the claims would preclude Card Activation from recovering damages accrued for infringement prior to last week’s reexamination certificate issue.  35 U.S.C. § 307(b).

Of course it is difficult for those not intimately involved in the ‘859 patent law suits to understand the full implications of the reexamination certificate issued last week.  Perhaps injunctive relief against future infringement is commercially more significant than damages for past infringement.  Or perhaps the commercially significant ‘859 patent claims were those not the subject of the reexamination and therefore left unamended.  In any event, victory in reexamination is usually a complex question, one not easily reduced to simple statements or statistical presentation.

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